You’ve decided to buy your first home. Congratulations x 100! Like the ‘first’ everything in life, this one’s going to be the one you remember the most. Now without further ado, let’s jump right into how to plan and execute this important milestone decision.
1)Whether you’re single, a young DINK couple, a SINK couple or a DI/SI couple with kids (that’s Double/Single Income, No Kids) you’re going to want to track and examine your expenses for 4-6 months. Be scrupulous and note down all your spends (get a good broker activated on your house hunt in the meantime) You’ll want to assess:
a)How much you can trim each month, and subsequently, how much more you can save each month
b)How much you can stretch (because the house you want is ALWAYS out of your budget)
c)And finally, the EMI you can realistically afford now after factoring in future raises and improvements to your finances
2)Ask around to know how much you’ll need to factor as down payment, and figure how much of you can generate personally (from your own savings, and via loans from family and friends) This way, you can keep your loan request to the bank as low as you can manage to.
3)Start talking to banks early to know the offers available to you. If you already had a loan running on a vehicle or an earlier personal loan, discuss consolidating them into one EMI with your banker - is important is to get in touch with multiple banks for debt consolidation and find out various provisions like interest rates, tenure and collateral needed.
4)Always keep a reserve fund of at least 3 EMIs in your account, and have investments you can dip into for any unexpected expenses (like repairs or home improvements you want to make before moving in)
5)House-buying is not a romantic endeavor. Be ruthless and assess a house for all its parameters. Is it located where you need to be/can afford to be? Does it have the supporting infrastructure you need for smooth living (nearness to schools, transport, highways, hospitals)? Is it ready for you/your family as it is, or will it need modification? These are objective questions and the answers should be as well. There is no such thing as love at first sight. It follows after you’ve made the best-considered choice.
6)Talk to your broker and banker about the final closing cost, including all the fees and paperwork.
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